The Air Force’s acting secretary says the uncertainty around the federal budget makes it extremely hard to make decisions about the service’s future shape and size. But even if the budget cuts are undone, the service will need to get smaller, he said.

Eric Fanning, the undersecretary of the Air Force who’s currently serving as its acting top civilian, says both he and the service’s chief of staff, Gen. Mark Welsh, believe that even if the Air Force were funded up to the level it requested, it would still be spending too much money on people and planes and not enough making sure the force was trained and ready. But sequestration, he says, only adds to that problem.

Assuming the service has to meet the funding caps of the budget control act for the next several years, he says the Air Force would have to reduce in size by 25,000 airmen and 550 aircraft.

“The Air Force is too big for the budget going forward if it stays at the sequestered level,” he said. “That means we’re going to have to pull things out of it just to right-size it, and then pull even more things out of it to protect what we need for future investments.”

Fanning, speaking at a day-long summit organized by the online publication Defense One, said the Air Force is already building politically painful reductions into the two alternative budget plans it’s constructing for 2015. The version of the plan that incorporates sequestration into the picture assumes not just that the Air Force will have fewer aircraft and personnel, but that it will be doing fewer things.

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“We’re not good at cutting mission when we bring down resources, but we’re going to have to prioritize,” he said. “We’re living with sequestration, but we still have yet to submit a sequester-level budget. And we still don’t know what we’ll submit for 2015. The way things are going, I’m sure it will be a third entirely new budget. The Air Force budget is already meeting resistance in the Pentagon. The DoD budget will meet resistance in OMB. And when it comes to the Hill, you’ll hear the day it hits, because it will be loud. But we have to be able to pull things out of force structure to protect investments and readiness, and that’s going to be the hardest part of this. Whenever we submit a budget that reflects these spending levels, it’s going to have a lot of things in there that upset a lot of people.”

As with the other military services, Fanning says the Air Force’s main problem with sequestration isn’t so much the level of budget cutting involved — it’s the fact that the cuts are sudden. And because of that, money has to be taken from areas where it can be found quickly, mostly readiness and modernization. And Congress has put roadblocks in the way of other efforts that could help DoD meet its savings targets.

“They won’t let us do base closures, so that walls off infrastructure,” he said. “Getting money out of force structure takes a while. If you do it with voluntary incentives, it costs money up front to reduce your uniformed and civilian workforce. So it puts enormous pressure in the first two or three years on your investment accounts and your operations accounts. For someone like me, coming into a job when the budget’s coming down can be an exciting time because you’re there prioritizing and reshaping for the future. But you need some stability in the budget to do that. So more than worrying about sequestered level funding as the new norm, I worry about the new norm of instability in the budget process.”

That uncertainty, Fanning said, is putting the Air Force in a tough box. He says the Air Force certainly doesn’t want to make further reductions to its force structure or cancel modernization programs. But if the service is definitely going to live with sequestration for the long haul, it needs to know, because it needs to start making changes right now.

“On the one hand you’re holding out hope that you’ll get some deal and some relief, and you don’t want to make decisions to lop things off that you can’t replace. On the other hand, the longer you go without executing and making these decisions, the more difficult and the more expensive the problem becomes,” he said. “If you want to have an Air Force in 2015 with lower personnel costs, you need to start doing things now to get people out and give them time to understand their options and work through those processes. It’s not whether the Air Force can get smaller. It’s going to have to get smaller.”

And it may get smaller just through natural attrition. Fanning says Air Force leaders are very concerned about losing talented pilots and other airmen just because of the loss of training opportunities. In the first year of sequestration, the Air Force grounded 31 squadrons for at least some period of time. Fanning says the service will have to take similar actions for the next several years until it can get a better balance between the amount of money it spends on personnel and the amount needed to keep units ready.

“These are men and women who want to fly those planes, and they’re getting increasingly lucrative offers from the private sector,” he said. “The airline industry is about to face a pretty large scale forced retirement. They’ve got a big bubble coming through. And if you’re not flying your F-22 because it’s grounded, you might as well go fly something else. That’s a real concern of ours. We’re offering big bonuses over 10 years, but the pilots aren’t taking them. Because they’re not flying, and they don’t know what the future is, other than we’ve told them that in order to absorb the cuts of sequestration as quickly as we’re going to have to, we’re going to have flying hour issues for the foreseeable future. It’s going to take us five years to dig out of this. In 2014 and 2015, we’re going to have to continue these rolling groundings of two to three months per squadron.”